Toppers Pizza is planning aggressive growth with new franchise deals that could add 30 new restaurants to the 50-unit chain’s portfolio this year.
The Whitewater, Wis.-based concept took 22 years to grow to 50 locations, but plans could see it quadruple that unit count by 2020, necessitating a new focus on multiunit franchise deals, executives said.
The chain has inked its largest franchise agreements to date in the past few weeks, with two separate deals calling for five locations in the Minneapolis and Little Rock, Ark., markets. Since its founding in 1991, Toppers has grown via 13 corporate restaurants and single-unit franchise agreements, though several longtime operators now have built additional restaurants.
With its five-unit deals, Toppers expects new franchisees to build one restaurant in 2013 and another two units in 2014 and 2015, allowing the chain to meet accelerated goals, said Mark Cairns, director of franchise development.
“The five-unit deal does a couple things,” Cairns said. “It allows somebody to carve off a piece of territory, so they know where their future stores are going to be. It also allows them to search for real estate throughout a market instead of looking for just one intersection perfect for one store. So it broadens and might speed up the site selection process.”
Toppers’ 50th restaurant opened last week in Ann Arbor, Mich., which is coincidentally the headquarters of Domino’s Pizza, where Toppers founder and chief executive Scott Gittrich got his start in the pizza industry as a delivery driver. To date, Toppers has opened units mostly in Wisconsin and neighboring Midwestern states, but a new franchise push targets Iowa, Missouri, Kansas, Texas and Arkansas.
The chain disclosed an average unit volume of more than $930,000 and an average net profit of more than $130,000 per unit.
Cairns added that Toppers has entertained discussions for multiunit deals before, and that bigger players are getting more interested in franchising with Toppers, “but you almost have to get to that 150-unit mark to even catch their attention.”
But as Toppers continues to scale and approach its near-term growth targets, the company would look to attract large franchise businesses that might operate dozens of noncompeting concepts and might find markets sold out for the biggest pizza brands.
“If there’s an Applebee’s franchisee that wants to open Papa John’s in St. Louis, but they couldn’t because the market is sold, we’d be an option,” Cairns said. “But they may say, ‘Toppers only has 50 stores; we have 30 Applebee’s.’ We’re starting to get a little more top of mind, so as we grow in units, we hope that next group of multiunit operators will be attracted to our brand as well.”
Before those 10- or 20-unit agreements become viable, the bulk of Toppers’ accelerated growth would come from more five-unit deals for which the brand is actively aiming, he said.
One of those first “five-pack” area development deals has been signed with Jennifer and Barry Friends to open Toppers locations in the Minneapolis market. Barry Friends has worked for several major foodservice distributors, and most of their children have worked in the restaurant industry, including their high-school-age daughter, who currently works part-time at McDonald’s.
The Friends family plans for four of their children to manage and operate four separate Toppers locations to be built over the next few years.
“Both Jennifer and Barry come to the table with a lot,” Cairns said. “He understands food and franchising, she’s probably the biggest fan of Toppers in the house, and even their kids have gone to multiple [Nation’s Restaurant News’ Multi-Unit Foodservice Operators] conferences. We landed on a family that wants to grow and has the succession plan built in.”